Peter Thiel Exits ETHZilla Amid Crypto Market Challenges
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Peter Thiel, known for his ventures with PayPal and Palantir Technologies, has completely divested from ETHZilla, a firm focused on managing digital asset treasuries, particularly Ethereum.
This exit comes at a time when treasury firms in the cryptocurrency space are encountering significant challenges, primarily due to a downturn affecting the broader market.
Last year saw a surge in interest in digital asset treasury strategies, inspired by successful moves like those made by Strategy (formerly MicroStrategy). Numerous companies began accumulating cryptocurrencies as reserves, which attracted considerable investor interest during rising market conditions.
Previously, Thiel’s Founders Fund was reported to hold a 7.5% stake in ETHZilla, but recent filings with the SEC reveal that as of the end of 2025, Thiel’s entities have no ownership in the firm, indicating a total withdrawal.
Market analysts noted that Thiel’s full exit is noteworthy, suggesting it may reflect a shift in investment sentiment or risk management related to Ethereum holdings.
The crypto landscape has been particularly volatile, especially highlighted by the severe market crash in October, often referred to as the “10/10” or “Black Friday” incident. Following this event, the decline extended into subsequent months.
Ethereum prices witnessed a considerable drop of 28.4% in the fourth quarter of 2025, marking the first negative quarter for the cryptocurrency since 2022. January 2026 saw a brief uptick, but this was short-lived, ending the month with a further decline of 17.7%. By February, the situation worsened, resulting in an additional 18.1% drop, with the price hovering around $2,017.
The decline in Ethereum’s value has had palpable effects on digital asset treasury firms, leading to diminished asset values and lower stock prices. For instance, BitMine reported unrealized losses surpassing $7 billion, alongside a year-to-date share price decrease of 25.7%.
ETHZilla, which rebranded from its previous identity as 180 Life Sciences to focus on Ethereum treasury management, has also suffered. Once holding over 100,000 ETH, the company began to reduce its exposure as market conditions worsened. In late October, ETHZilla liquidated approximately $40 million in Ether, using the proceeds for share buybacks.
By December, the firm executed a second round of asset sales, raising about $74.5 million to address senior secured convertible debt. Current data indicates that ETHZilla’s Ethereum holdings have decreased to 69,802 ETH.
In light of these developments, ETHZilla has announced a new strategic direction through its subsidiary, ETHZilla Aerospace, which aims to offer tokenized investment opportunities linked to leased jet engines.
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